Reduce Credit Card Debt by Dermot Farrell

http://www.CreditCardDebtSecrets.org

If your credit card debts are out of control you may be thinking about ways to reduce credit card debt. There are a variety of debt relief routes which you can take, which include credit card debt settlement, credit card debt consolidation, and of course, bankruptcy. However, there is a third route, which although lesser known, and that is do-it-yourself credit card debt reduction.

How to Reduce Credit Card Debt The Do-It-Yourself (DIY) Way! Looking at the two popular debt relief strategies, of credit card debt consolidation and credit

card debt settlement, although both are effective in their own right, they differ quite a lot from each other. The more moderate one is credit card debt consolidation, whereby a debt relief company negotiates on your behalf, looking for a reduction in interest rates, while the more extreme route which you can take is credit card debt settlement. With debt settlement the debt settlement company negotiates for a one off settlement of the debt principal at a significantly reduced rate. Both strategies have their appeal, with credit card debt consolidation, the debt savings are not so good and it takes a long time to clear your debts, however it is practically risk free. Whereas, with credit card debt settlement, it produces astonishing savings very quickly, however, it has lots of downsides such as loss of credit rating, tax due on monies saved, and potential court cases. Regardless of which method you decide on to reduce credit card debt, the debt relief company will charge you a fee. In the case of credit card debt consolidation, they will charge a servicing fee throughout the consolidation process. This can become expensive, since debt consolidation usually runs over a period of several years. Whereas, with debt settlement, the debt settlement company only charges you if they are successful. However, their fee is usually set at around 15% of the money which they save

you. So for example if they reduce 40% from the debt of $20,000, then this comes to a saving off $8,000 and a fee in the region of $1200. So there is no question about it, if you opt to reduce credit card debt, without joining a debt relief program, there are some potential savings. However, if you reduce credit card debt by the DIY way, there are also some downsides to bear in mind.

What are the Downsides if I Decide to Reduce Credit Card Debt the DIY option?

If you want to reduce credit card debt with the do-it-yourself option, then you will have to contact your creditors directly, and negotiate with them all by yourself. It is this lack of leverage which is a potential hazard for anyone who wants to reduce credit card debt by themselves. Debt relief companies have both experience and an in depth understanding of credit card companies, their employees understand the methodologies which each credit card company applies, and they probably have a working relationship with most of the credit card companies. This puts the debt relief company at a serious advantage

over and above the DIY negotiator. If a lone credit card debtor contacts their credit card companies, seeking to reduce their debt, or even to reduce the interest on their credit cards, chances are that unless they withhold their payments for a long time, the credit card companies will simply ignore them, or give them some lip service. And even if the credit card debtor withholds their credit card payments, in order to gain this necessary leverage, in the process their credit score will end up been badly affected. To sum up, it’s not that the individual credit card debtor can’t self-negotiate; rather it’s just that unless they know what they are doing, they will more than likely either alienate the

credit card companies, or they will receive only a token discount on their credit card debts, or monthly interest rates.

So if I Want to Reduce My Credit Card Debt, on My Own, How can I Make it Work for Me? If you want to reduce credit card debt on your own, the first step is to prepare well before you start negotiating. There is no point in thinking to yourself that you are going to save on debt relief company charges, only to go out and make a Mickey Mouse effort with the negotiation process. Also, unless you are well versed in negotiation and credit card company debt handling protocol, you will have a difficult time, even if you do apply yourself. However, there is help at hand under the guise of debt relief negotiation education courses, which walk you through the stages required to renegotiate your debts. While there is a charge for these services their fees are fairly low, ranging anywhere from around $100 to $600, depending upon the level of tutoring provided by the provider. Of course, these self-negotiation courses will not suit every credit card debtor, because it must be kept in mind that there is a high level of organizational and negotiation skill required, which is beyond the skillset of a great many credit card debtors.

So, if you wish to take up the do it yourself option, unless you are used to negotiating with financial companies, you would be best advised to consider a coaching course. Also, if you take up this option, it is necessary that you have a certain range of aptitudes and skills, otherwise, you well be better off simply hiring the professionals to negotiate on your behalf. There is no question about it, it is possible to reduce credit card debt, the DIY way. However, it doesn’t suit all debtors. If you look into your particular circumstances and take an overview of your skillsets, then maybe this is a viable option for you to take. Certainly many credit card debtors do manage to reduce credit card debt the DIY way, maybe it is also your way too.